As the “on-demand” suggests, SVOD services are designed to allow viewers to watch TV how they want and when they want. With thousands of series at their fingertips, many viewers choose to “binge” watch content, consuming multiple episodes in one sitting.
But research suggests that giving viewers exactly what they want can backfire.
Pedro Ferreira is an associate professor in the department of engineering and public policy at Carnegie Mellon University. In 2020, he co-authored a paper entitled “The Effect of Binge-Watching on the Subscription of Video on Demand”.
Ferreira’s research found that binge-watching can have a negative impact on SVOD platforms’ subscriber rates.
“With binge-watching, people consume entire seasons in a matter of days and all the seasons of the same TV show in a few weeks. Once they do so, they are more likely to quit service or, for example, abandon a free trial. Our research shows that binge watching can reduce SVoD subscription as much as 10 percent,” Ferreira said.
Some SVOD platforms, in particular Netflix, will release all the episodes of an original series at one time. Something which allows viewers to binge-watch new content as well as back catalogues of TV on the platform.
As the largest SVOD platform in the world, Netflix set the standard for how subscription services release content. However, newer players coming onto the scene have since eschewed the tactic established by Netflix of releasing all episodes in one go.
Having a more gradual release schedule does make sense for these services, says Rahul Patel, a senior analyst at Ampere Analysis.
“A lot of the newer services, like Disney+ and Apple TV Plus, have been releasing their shows weekly,” said Patel, “And I think as a mechanism to fight against the threat of subscriber churn, the logic is fairly sound. Drawing out a show’s release over two or three months increases the ability to monetise users. If a consumer wants to see that content as it’s released, that will require them to subscribe for a longer period.”
Netflix has a huge back catalogue of well-known originals for viewers to consume, but for smaller services, slower release schedules can be particularly impactful.
“I think it’s definitely a good strategy for these new platforms in particular. These platforms typically have less developed slates of content, and they’re releasing fewer originals per month compared to Netflix and Amazon,” he said.
Keeping the viewer on the service for longer periods of time through a gradual release schedule has additional advantages for retaining subscribers.
“This repeated interaction with the platform is likely to get them to browse additional content that may then interest them. Then in the process and organically, users end up getting exposed to more content, realising more value from their subscription,” said Pedro Ferreira.
Beyond the release schedule
A more gradual release schedule is one obvious way that SVOD services can prevent viewers from bingeing and then unsubscribing, but there are other ways in which platforms can prevent this behaviour.
“Our research also shows that one way to mitigate this effect is to issue recommendations to users pointing them to other titles in the SVoD catalogue that they would not otherwise search for or know about. This way, the platform may keep users engaged for longer periods of time and thus avoid churn,” said Pedro Ferreira.
“Some of the most effective recommender systems for movies and TV shows work by suggesting titles to watch that “people like you” have been watching but you have not, where “people like you” are identified as people that have been watching the same titles as you,” added Ferreira.
Recommendation mechanisms may be an effective way to keep users on the platform, but in order to do this SVOD platforms must have the content to tempt users to move onto other shows.
“Consumers usually have a hard time searching for content when there is too much of it to browse through. This is when recommendations work well. They reorder titles showing first the most promising ones to each user,” said Ferreira, “Also, recommendations work better if there are enough users on the platform to learn from. In sum, a provider with few users and a small catalogue will have a very hard time if it allows for binge-watching, even with recommendations.”
Rahul Patel says that discounts over a period of time can be another way to retain users.
“One strategy, not necessarily related to content offering, can be a discounted rate across the year, which is something we’ve seen Disney+ employ. That can work to essentially lock consumers into a 12 month contact,” he said.
Is streaming hinged on binge?
Is the ability to binge-watch a new show something that consumers have come to expect from SVOD services?
“One of the questions we include in a survey, which we run every two quarters, is do you agree with the statement that ‘I watch several episodes of a TV show back to back’? So essentially, asking consumers if they binge watch,” said Ampere’s Patel, “And the interesting thing is that respondents agreeing with that sentiment was generally rising from late 2015, up to 2019. But since then, it’s actually started to decrease a bit.”
Binge watching is not necessarily something that has become embedded in viewers’ behaviour, says Rahul Patel.
“For decades, people have been watching weekly releases for their top new shows.It’s only when Netflix started releasing originals that binge-behaviour for new content became quite common,” he said.
